New E-book Details Role of Emotion in Site Selection
12 Dec, 2012
Attention Economic Development Practitioners:
If you had to explain to a CEO how your community can enable achievement of his/her personal ambitions, what would you say?
One of the biggest misconceptions is that emotion plays no role in site selection decisions, according to a new, free e-book, “Role of Emotion in Decisions,” published by the Burghard Group LLC. The e-book’s author, Ed Burghard, offers compelling arguments that emotions hold a major seat at the site selection table, and among other points, shares data from a survey conducted in 2011 of more than 1,000 CEOs.
“The purpose of the survey was to better understand what CEOs feel is important in their deciding where to locate a business operation,” Burghard says. “It is one of the most comprehensive surveys I have read on the subject, and you may be surprised by the results.”
Burghard notes if you want to know what a CEO thinks, you need to ask a CEO; most surveys and indicators on site selection criteria tally the thoughts of site consultants. What’s more, surveys provide data on the attributes the survey designer elects to collect information on.
Emotional attributes complement rational attributes in the site selection process. After all, rational attributes are what lands a community on a short list of locations under considerations. However, the site selection process is not a closed bid process. “It is designed to ensure the project NPV for the final two to three location options is roughly equivalent,” Burghard says. “On a rational basis it doesn’t matter which option the CEO selects. The CFO is going to be happy with any choice. Without a rational basis to differentiate between location options, the final decision is made on an emotional basis.”
Initial feedback in regard to the e-book includes commentary from Dan Meges, an economist for Chmura Economics and Analytics, who posted:
“I think this e-book provides some great insight and places the site-selection process in a more balanced context. All decisions are ultimately a mix of rational and emotional factors. I wonder how the emotional factors interact with assessments of down-side risk and low-probability events. We know from Prospect Theory and the work of Kahneman & Tversky that most people are inclined to overweigh the (negative) value of low probability/high value losses. Assuming that the short-list of sites stack up pretty closely on the “rational” data-driven criteria, I suppose much can hinge on the trust in the leadership in the various locations and the perception of the CEO of which group can best protect them from these low-probability, hard-to-predict contingencies that could jeopardize the profitability of their project.”
Click here to download your free copy of the e-book.
About the Burghard Group
The Burghard Group is driving an initiative called Strengthening Brand America. The aim is to assist economic development professionals to better understand how to leverage the power of place branding as a strategy to become more globally competitive for capital investment.
Illustration “Freedom” by graur razvan ionut at Free Digital Photos.net